UNIFE calls political agreement on EU-Japan FTA a step in the right direction but stresses the importance of monitoring rail deal

Following today’s political agreement between the European Commission and the Japanese government, UNIFE calls on both parties to monitor the enforcement of commitments in order to ensure a true level-playing field for European rail suppliers. The Association, which represents the European rail supply industry, welcomes the long-awaited announcement of the removal of the Operational Safety Clause (OSC) – a major non-tariff barrier impacting the European rail supply industry – within a reasonable transition period of maximum one year after entry into force of the agreement.

UNIFE also welcomes the exchange of letters on railways to anchor the current cooperation between the two parties, in particular the Railway Industrial Dialogue. It is of utmost importance that Japan renews its commitment to implement the ‘one-year package’ of measures on railways enforced in 2014. The measures have been helpful to begin increasing transparency in procurement and facilitating market penetration by European suppliers, even if examples of new business opportunities remain limited to this day.

However, UNIFE fears that the outcome on coverage of rail and urban transport entities in the public procurement chapter may be limited. Further coverage would have compensated the delisting of several Japanese rail operators from the WTO Agreement on Government Procurement (GPA). It is now key to ensure that private or non-covered entities abide by codes of conduct to ensure transparent and non-discriminatory treatment of European rail suppliers.

Finally, the European rail supply industry is also concerned about the enforcement of the commitments made by Japan and the actual changes in business practices. UNIFE calls on both parties to set up a strong and dedicated method to monitor rail procurement.

Philippe Citroën, Director General of UNIFE, commented "Since the beginning of the EU-Japan Free Trade Agreement negotiations in 2013, the European rail supply industry has been striving, with the support of the European Commission, to achieve a level-playing field between access to the Japanese and European rail markets. The removal of the Operational Safety Clause is a win for our industry, but it also comes with a further opening of the EU public procurement market. Today’s agreement is only a first step – enforcement and monitoring of agreed measures will be equally important. Therefore, we urge both parties to redouble their efforts to guarantee new and tangible market access opportunities for European manufacturers on the Japanese rail market."